Laws regarding enforcement need to keep pace with crypto developments

I REFER to the article "UBS explores offering crypto investments to rich clients: sources" (BT, May 10), which reported that global securities firms such as UBS, Goldman Sachs, Morgan Stanley and Julius Baer are increasingly offering crypto asset services in response to client demand.

This is unsurprising. In March, Christie's sold a Beeple digital artwork for US$69 million. In April, the price of Bitcoin surged to a record high of more than US$63,000. There is no doubt that crypto assets are a rising new asset class of substantial value. As international judge Simon Thorley astutely observed in the 2019 Singapore International Commercial Court decision of B2C2 Ltd v Quoine Pte Ltd, crypto assets are intangible property with an identifiable value.

In light of this, it is imperative that Singapore's laws for enforcement against crypto assets are updated to keep pace with global developments.

At present, there are no express provisions under Singapore law that allow for a judgment creditor to seek disclosure of or enforcement against crypto assets. For example, the writ of seizure and sale can be only used to seize tangible personal property, immoveable property and securities. Garnishee proceedings only allow attachment of money debts.

While the statutory language for Mareva injunctions and ancillary disclosure orders appear to be broad enough to compel the disclosure of a defendant's crypto assets, there is no local jurisprudence that has positively affirmed this.

I therefore suggest that this issue be taken into consideration for the impending civil justice reforms that will be operationalised by the fourth quarter of this year.

While the size of the cryptocurrency market in Singapore is still small at the moment - comprising less than 0.01 per cent of the assets in funds managed by MAS-regulated fund managers - it is never too early to plan for the future.

To echo Minister Edwin Tong's keynote address at the Litigation Conference Workshop 2021: we need to ensure that the legal sector can stay ahead of the curve in what a post-pandemic era looks like.

Danny Quah Commercial litigator with Providence Law Asia